Small Business Saturday: A Boon for Business or for AmEx?

Diana Ransom is features editor at Inc. She has been covering the never-dull world of small business and entrepreneurship for years at a variety of publications, including The Wall Street Journal, SmartMoney.com, the New York Daily News, Fast Company, and Entrepreneur. She lives in Brooklyn, New York.

American Express's Small Business Saturday campaign is an obvious win for Main Street, but is the company's own bottom-line boost getting in the way?

Since its launch in 2010, Small Business Saturday has quickly taken on a life of its own. The credit-card giant began the shopping holiday, which sits between Black Friday and Cyber Monday, with the goal of increasing engagement among independent small businesses. And since attracting the support of everyone from Barack Obama to Facebook--and helping reel in billions for small retailers in the process--some wonder if now might be the time for American Express to politely bow out.

On numerous levels, AmEx's helpful influence on the shopping holiday, which will take place on Nov. 30, can't be denied. Obviously, the company's subsidy has been a big enticement for consumers. In the first three years of the initiative, AmEx provided a $25 refund for every shopper who spent at least that amount at participating small businesses. This year, the subsidy is just $10, but the amount of marketing gusto the company packs into the initiative should also be taken into consideration.

It's difficult to surf the web without seeing ads that remind consumers of the shopping holiday. This year, the company is also sponsoring 50 towns across the country to provide free short-term metered parking in each city's main shopping districts.

But it's hard to be rosy about AmEx. After all, the company offers a subsidy only to consumers who have American Express cards--and register them--can get reimbursed. And while shoppers are welcome to shop at any small business this upcoming Saturday, only the merchants that accept AmEx cards are able to participate. Then only those owners who spend the man-hours registering for the event in the first place will get featured on AmEx's Shop Small Map.

The company can boast helping shore up billions in sales for small businesses, but make no mistake: AmEx is also profiting. The interchange fees (anywhere from 1.5% to 3.5%) that merchants pay to issuers that then get rerouted to credit-card companies like AmEx when consumers wield plastic, aren't cheap. And among the bunch, AmEx has long been known as the most expensive. Though, merchants may negotiate this rate.

So that $5.5 billion in sales that AmEx boasts helping reel in for small businesses last year--and the estimated $5.3 billion bump expected this year--surely netted AmEx a pretty penny too.

In a press conference yesterday, small-business advocacy group Main Street Alliance broadcast its dissatisfaction with AmEx's continued dominance of the holiday--calling the company's influence nothing but a marketing ploy. Critics including Gene Marks, writing for the Huffington Post, have similarly skewered AmEx.

To be fair, AmEx did in fact launch Small Business Saturday as a marketing campaign. It was originally conceived by agency, Digitas. And by all accounts it's been a success.

Corporate partners such as Facebook, Twitter and FedEx have thrown their support behind the initiative. The U.S. Small Business Administration's acting director, Jeanne Hulit, wrote an open letter this week asking merchants and consumers to participate. Congress has recognized the holiday. And Barack Obama, famously, at this point, stopped into a D.C.-area bookstore last year to shop small.

American Express Vice President May Ann Fitzmaurice Reilly acknowledged the day's popularity, in speaking with Bloomberg Businessweek. "We couldn’t be more proud and more humbled by how small businesses have taken ownership,” she says. “It’s become a part of the shopping culture, along with Black Friday and Cyber Monday.”